Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney before taking action.
When two or more parties own property together and agree to sell it jointly, each owner typically bears a proportionate share of carrying costs until closing. Under Utah law, if one co-owner pays more than their fair share, they may seek contribution from the others through contract remedies or a partition action.
1. Identify Carrying Costs
Carrying costs often include:
- Mortgage interest or loan payments
- Property taxes and assessments
- Insurance premiums
- Maintenance, repairs, and utilities
2. Determine Each Owner’s Share
Most joint-sale agreements specify ownership percentages. If the agreement is silent, Utah presumes equal shares under co-tenant principles. Calculate each owner’s obligation as follows:
Owner’s Share = (Owner’s Percentage) × (Total Carrying Costs)
Example: Two co-owners with equal 50/50 interests incur $4,000 in combined costs. Each owes $2,000.
3. Calculate Time-Based Adjustments (If Applicable)
If ownership stakes change over time or one owner takes possession, prorate expenses by the period of responsibility:
Daily Rate = Total Cost ÷ Number of DaysHeld Owner’s Amount = Daily Rate × DaysHeldByOwner
4. Demand Contribution Informally
- Prepare an itemized statement showing each cost and dates paid.
- Send a written demand letter by certified mail.
- Propose a deadline (e.g., 30 days) for reimbursement.
5. File a Lawsuit for Contribution or Partition
If negotiation fails, Utah law provides two main remedies:
- Contribution Action: File a civil suit seeking money judgment for the unpaid share of carrying costs.
- Partition Action: Under Utah Code § 57-8-4, the court can order sale of the property and distribute net proceeds after deducting each co-owner’s proportionate outgoings, including carrying costs. Utah Code § 57-8-4.
6. Enforcement of Judgment
Once you obtain a judgment for contribution or partition, you may record an abstract of judgment as a lien on the co-owner’s interest or seek garnishment of their assets.
Helpful Hints
- Maintain clear records: Keep receipts, bank statements, and invoices for all carrying costs.
- Define terms in writing: Ensure “carrying costs,” ownership percentages, and payment schedules appear in your joint-sale agreement.
- Use mediation: An early mediator can resolve disputes quickly and keep costs down.
- Consult a real estate attorney: Complex ownership arrangements or disputed bills benefit from legal advice.
- Act promptly: Utah’s statute of limitations for contract claims is four years (Utah Code § 78-12-1).